Toronto, Ontario -
KINROSS GOLD CORPORATION (TSE-K; NYSE-KGC)
announced today that
results for the three months and six months ended June 30, 1999 are as follows:
April 20, 1999
Toronto, Ontario -
KINROSS GOLD CORPORATION (TSE-K; NYSE-KGC)
announced today that
results for the three months ended March 31, 1999 are as follows:
q
Finanacial Tables
All results are expressed in United States Dollars unless otherwise stated.
Kinross provides the following detail regarding the Company’s performance during the first quarter
1999. Although the average spot price of gold was $287 per ounce compared to $294 in 1998, cash
flow from operations before working capital changes for the quarter was $17.3 million, or six cents per
share, compared to $6.0 million or five cents per share in 1998. Gold equivalent production for the
quarter was 255,135 ounces at record low total cash costs of $198 per ounce.
Net Loss
Net loss for the three months ended March 31, 1999 was $10.0 million, or four cents per share on
revenues of $78.7 million. This compares to the net income for the first quarter of 1998 of $2.2 million,
or one cent per share on revenues of $42.6 million. The average realized price in the first quarter of
1999 was $295 per ounce of gold as compared to average spot prices of $287, while the average
realized price in the first quarter of 1998 was $317 per ounce as compared to average spot prices of
$294.
Revenues
Gold and Silver Sales
The Company’s primary source of revenue is from the sale of its gold and silver production. The
Company produced 255,135 ounces of gold equivalent in the first quarter of 1999, which compares to
123,423 ounces the previous year. Revenue from the sale of 253,770 ounces of gold and 74,000
ounces of silver was $75.2 million, 94% higher than the $38.8 million of revenue reported in the first
quarter of 1998 from the sale of 106,467 ounces of gold and 798,000 ounces of silver.
Summary Information
Gold production
Gold revenues
Average realized gold price per
ounce
Average gold spot prices
1999
253,770
$74,900,000
$295
$287
1998
106,467
$33,799,000
$317
$294
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Silver production
Silver revenues
Average realized silver price per
ounce
Average silver spot prices
Operating Performance
74,000
$301,000
$5.28
$5.29
798,000
$5,026,000
$6.30
$6.25
The 106% increase in gold equivalent production resulted in higher production costs of $51.4 million in
the first quarter of 1999, as compared to $29.4 million during the same quarter in 1998. On a per
ounce basis, total cash costs per ounce of gold equivalent continued to be lowered and were $198 for
the quarter. This compares to $232 per equivalent ounce of gold for the same quarter of 1998 and
$208 during the fourth quarter of 1998.
Consolidated Production Costs
($ per Ounce of Gold Equivalent)
For the three months ended March
31,
Cash operating costs
Royalties
Production taxes
Total cash costs
Reclamation
Depreciation and amortization
Total production costs
1999
1998
$185
13
-
198
3
103
$304
$230
1
1
232
6
58
$296
Total cash operating costs per ounce of gold equivalent improved in the first quarter of 1999 as a result
of the low cost mines added to the portfolio upon completion of the merger with Amax Gold Inc. and
improved operating performance at the Blanket and Macassa mines.
Performance at Hoyle Pond was adversely affected by the following factors during the quarter: The
aftermath of a fatality occurring in the fourth quarter of 1998; a very disruptive union organizing
attempt that was defeated, and technical and productivity issues underground. Production bottlenecks
have been overcome with the development program achieving scheduled performance. Normal
production will resume during the second quarter and is expected to be sustained for the balance of the
year. Taking the above factors into account, Hoyle Pond’s 1999 production is forecast at 146,000
ounces of gold at a total cash cost of $180 per ounce.
Production at Fort Knox was adversely affected early in the quarter by extremely cold weather. Late in
the quarter mill throughput was lower than anticipated due to unusually hard ore and lower than
planned grades in the latter half of March. Since early April, operations have returned to normal and
the operation is expected to recover the first quarter shortfall during the balance of the year.
Kubaka’s performance is significantly better than planned due to higher than expected mill feed grade,
greater mill throughput and lower operating costs. This trend is expected to continue for the remainder
of the year and result in an upward revision in expected gold production to 235,000 ounces (Kinross
53%) at a total cash cost of just under $150 per ounce.
Outlook
As at March 31, 1999, the Company has $160.6 million of cash and operating working capital of $33.1
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million for total working capital of $193.7 million. This combined with low cost production, and a
manageable debt repayment schedule, provides the Company with a solid platform for future growth
when opportunities present themselves.
This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of
the United States Securities Exchange Act of 1934, as amended. All statements, other than statements
of historical fact, included herein, including without limitation, statements regarding potential
mineralization and reserves, exploration results and future plans and objectives of Kinross Gold
Corporation ("Kinross"), are forward-looking statements that involve various risks and uncertainties.
There can be no assurance that such statements will prove to be accurate and actual results and future
events could differ materially from those anticipated in such statements. Important factors that could
cause actual results to differ materially from Kinross’ expectations are disclosed under the heading
"Risk Factors" and elsewhere in Kinross’ documents filed from time to time with the Toronto Stock
Exchange, the United States Securities and Exchange Commission and other regulatory authorities.
-30-
For further information:
Robert M. Buchan
Chairman and Chief Executive
Officer
Tel: (416) 365-5650
Gordon A. McCreary
Brian W. Penny
Vice President,
Vice President, Finance and
Investor Relations and Corporate Financial Officer
Development
Tel. (416) 365-5132
Tel: (416) 365-5662
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Kinross Gold: News Archive April 4, 1999 First Quarter Financials
Page 1 of 6
BACK
1999 First Quarter Financials, Kinross Gold Corporation
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Changes in Cash Flows
Production Data
Consolidated Balance Sheets
(expressed in millions of U.S. dollars)
(unaudited)
As at
March 31
1999
Assets
Current assets
Cash and cash equivalents
Bullion settlements and other accounts receivable
Inventories
Marketable securities
Mineral properties, plant and equipment
Long - term investments
Deferred charges and other assets
Liabilities
Current liabilities
Accounts payable and accrued liabilities
Current portion of long - term debt
Current portion of site restoration cost accruals
As at
December 31
1998
$ 160.6
55.5
48.7
1.4
266.2
819.1
23.5
14.6
$ 1,123.4
$ 153.4
55.4
54.6
1.2
264.6
809.8
25.0
15.4
$ 1,114.8
$ 45.8
21.3
5.4
72.5
127.9
52.9
7.0
26.8
41.6
3.1
331.8
88.3
928.1
3.3
104.7
(308.0)
(24.8)
703.3
$ 49.4
25.1
5.9
80.4
125.8
52.0
6.9
29.0
42.7
3.1
339.9
88.3
904.2
3.6
103.1
(296.4)
(27.9)
686.6
Long-term debt
Site restoration cost accruals
Deferred income and mining taxes
Deferred revenue and other
Debt component of convertible debentures
Redeemable retractable preferred shares
Convertible preferred shares of subsidiary company
Common shareholders' equity
Common share capital
Contributed surplus
Equity component of convertible debentures
Deficit
Foreign currency translation adjustments
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Kinross Gold: News Archive April 4, 1999 First Quarter Financials
$ 1,123.4
Page 2 of 6
$ 1,114.8
Consolidated Statements of Operations
For the three months ended March
31
(expressed in millions of U.S. dollars except per share amounts)
(unaudited)
1999
Revenue
Mining revenue
Interest and other income
Expenses
Operating
General and administrative
Exploration and business development
Depreciation, depletion and amortization
$ 75.2
3.5
78.7
51.4
2.5
2.1
26.9
82.9
(4.2)
-
0.2
(0.1)
(3.6)
1998
$ 38.8
3.8
42.6
29.4
1.2
1.2
7.2
39.0
3.6
0.8
-
(0.1)
(1.2)
(Loss) income before undernoted
Gain on sale of marketable securities
Foreign exchange gain and other
Share of loss of associated companies
Interest expense
(Loss) income before taxes and dividends on convertible preferred
shares of subsidiary company
Provision for income and mining taxes
(Loss) income for the period before dividends on convertible preferred
shares of subsidiary company
Dividends on convertible preferred shares of subsidiary company
Net (loss) income for the period
Increase in equity component of convertible debentures
Net (loss) income for the period attributable to common
shareholders
(Loss) earnings per share
Basic
(7.7)
(0.6)
3.1
(0.9)
(8.3)
(1.7)
(10.0)
(1.6)
$ (11.6)
2.2
-
2.2
(1.5)
$ 0.7
$ (0.04)
$ 0.01
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Kinross Gold: News Archive April 4, 1999 First Quarter Financials
Page 3 of 6
Weighted average number of common shares outstanding
(millions)
Total issued and outstanding common shares at March 31
(millions)
296.0
302.1
129.8
165.0
Consolidated Statements of Changes in Cash Flows
For the three months ended March 31
(expressed in millions of U.S. dollars)
(unaudited)
1999
Net inflow (outflow) of cash related to the following activities:
Operating:
(Loss) income for the period before dividends on convertible preferred
shares of subsidiary company
Items not affecting cash:
Depreciation, depletion and amortization
Gain on sale of marketable securities
Deferred income and mining taxes
Deferred revenue realized
Site restoration cost accruals
Other
1998
$ (8.3)
26.9
-
-
(2.3)
0.9
0.1
17.3
$ 2.2
7.2
(0.8)
(1.1)
(2.0)
0.6
(0.1)
6.0
13.9
(2.0)
1.0
5.4
4.8
(1.0)
28.1
0.4
129.4
(0.9)
(0.3)
-
128.6
(4.8)
(4.6)
-
-
-
(9.4)
147.3
190.3
$ 337.6
Deferred revenue - hedging gains
Changes in non-cash working capital items
Bullion settlements and other accounts receivable
Inventories
Marketable securities
Accounts payable and accrued liabilities
Effect of exchange rate changes
Financing:
Issuance of common shares, net
Issuance of subscription rights
Convertible debentures
Repayment of debt
Dividends on convertible preferred shares of subsidiary company
Investing:
Additions to mineral properties, plant and equipment
Merger costs incurred
Business acquisitions, net of cash acquired
Long-term investments and other assets
Proceeds from the sale of fixed
assets
Increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of period
-
(0.2)
5.9
-
(4.2)
1.0
19.8
(2.0)
-
(1.1)
(1.8)
(1.7)
(6.6)
(6.3)
-
(2.3)
0.6
2.0
(6.0)
7.2
153.4
$ 160.6
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Kinross Gold: News Archive April 4, 1999 First Quarter Financials
Production Data
Gold Equivalent Production -
Ounces
Page 4 of 6
Three Months ended
March 31
1999
Primary operations:
Hoyle Pond
Macassa
Fort Knox
Kubaka
Denton-Rawhide
Refugio
Blanket
28,153
20,120
77,081
65,953
16,338
26,496
9,942
244,083
Other operations:
DeLamar
Candelaria
Hayden Hill
Guanaco
QR
-
-
4,109
6,943
-
11,052
Total gold equivalent ounces
255,135
17,058
9,442
-
-
8,697
35,197
123,423
46,404
15,039
-
-
18,501
-
8,282
88,226
1998
Consolidated production costs per equivalent ounce of gold
Cash operating costs
Royalties
Production taxes
Total cash costs
Reclamation
Depreciation and amortization
Total production costs
$ 185
13
-
198
3
103
$ 304
$ 230
1
1
232
6
58
$ 296
Cash operating costs
(Dollars per equivalent ounce of gold)
Three Months ended
March 31
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Kinross Gold: News Archive April 4, 1999 First Quarter Financials
1999
Primary operations:
Hoyle Pond
Macassa
Fort Knox
Kubaka
Denton-Rawhide
Refugio
Blanket
$ 241
228
211
100
217
240
135
186
Other operations:
DeLamar
Candelaria
Hayden Hill
Guanaco
QR
-
-
161
162
-
162
$ 185
Total cash costs
(Dollars per equivalent ounce of gold)
Primary operations:
Hoyle Pond
Macassa
Fort Knox
Kubaka
Denton-Rawhide
Refugio
Blanket
$ 243
228
211